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On Morals, Markets, and Climate Change: Exploring Pope Francis’ Challenge

This article in Law and Contemporary Problems explores the contrast between the movement toward environmental markets, characterized by the emergence of new carbon markets across the globe, and the renewed opposition to markets manifested in the pope’s encyclical and the views of some environmental advocates. It considers the arguments raised by these latter critics, explores alternative views of their concerns, and examines how market-based climate policies could be designed to alleviate these concerns. Others have examined the moral and ethical dimensions of market-based climate policies, but this article contributes to the literature by providing a contemporary examination of the papal encyclical’s prominent questioning of the use of markets to address climate change. It also speaks to issues that more than 190 countries now face under the Paris Agreement and that forty-eight U.S. states face under the Clean Power Plan as they decide what role, if any, market-based instruments will play in their pursuit of the greenhouse gas reductions. And it explores options for designing a market-based instrument to address climate change in ways that could ease some of the moral criticisms, and discusses some of the tradeoffs involved in those design choices. Part 2 reviews how market-based mechanisms are being designed for climate change policy. Part 3 examines the pope’s encyclical and the moral issues it raises regarding carbon markets. Part 4 assesses in more detail the moral objections to using market-based mechanisms for climate change policy and offers counterpoints to these arguments. Part 5 discusses possible ways to reconcile these viewpoints by designing market-based climate policies in ways that resolve or reduce the critics’ concerns and discusses the tradeoffs associated with each approach. Part 6 offers specific insights into the decisions faced and tradeoffs presented by market-based climate policies.

Authors: Jonas J. Monast, Brian C. Murray, and Jonathan B. Wiener

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Climate and Energy

Clean Air Act

Environmental Economics

Journal Articles

A State Policymaker’s Guide to Power Sector Modeling

In a new report, the Bipartisan Policy Center and Nicholas Institute for Environmental Policy Solutions explore the value, use, and limitations of economic modeling of the electricity sector. The report presents a suite of recent analyses by different organizations, showing how economic modeling can be used to simulate possible policy, market, and technology changes as the electricity sector transforms due to growth of domestic natural gas, increased use for electric generation, the rapid progress of renewable technologies, and environmental regulations.

It is meant to be a guide for state policymakers who have both the benefit and challenge of unpacking modeling results and figuring out how best to learn from diverse findings. It provides them with both an understanding of how to best utilize economic models and interpret their results as well as explores key modeling structures often being deployed to model carbon regulations such as the Clean Power Plan and input assumptions that impact power sector modeling results.

Authors: Blair Beasley, David Hoppock, Jennifer Macedonia, Martin Ross, and Tracy Terry

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Climate and Energy

Clean Air Act

Environmental Economics

State Policy

Reports

Blue Carbon Financing of Mangrove Conservation in the Abidijan Convention Region: A Feasibility Study

Coastal vegetated ecosystems such as mangrove forests, seagrass meadows, and salt marshes have long benefited coastal communities and fisheries, and in recent years have been recognized internationally for their significant capacity to sequester and store carbon (“blue carbon”)—at rates that surpass those of tropical forests. Yet these ecosystems are being converted rapidly. Current annual mangrove deforestation has been estimated to emit 240 million tons of carbon dioxide. For this reason, financing mechanisms to pay those tropical countries that have significant blue carbon resources to reduce greenhouse gas (GHG) emissions from deforestation have been explored as a means to fund mangrove conservation. This report by the United Nations Environment Programme, the Abidjan Convention Secretariat, and GRID-Arendal explores the potential of international carbon finance mechanisms to help fund mangrove conservation along the coast of West, Central, and Southern Africa that is covered by the Abidjan Convention—from the southern border of Mauritania to the northern border of Angola—and the scale of economic benefits that this conservation might provide for communities and countries in the region, including benefits not always recognized in traditional assessments or valuations. This report aims to increase knowledge about blue carbon stocks in West, Central, and Southern Africa and the steps that interested communities and countries in the region could take to secure international payments for their conservation and avoided GHG emissions.

Authors: John Virdin, Tibor Vegh, Connie Y. Kot, Jesse Cleary, Patrick N. Halpin, Christopher Gordon, Marie-Christine Cormier-Salem, and Adelina Mensah

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Blue Carbon

Blue Economy

Climate and Energy

Ocean and Coastal Policy

Environmental Economics

Reports

Making Sure the Blue Economy is Green

Given the growing and seemingly limitless capacity to industrialize the oceans, there is a need to reimagine how to effectively measure, monitor and sustainably manage this seventy-one percent of the Earth's surface. In a commentary for the journal Nature Ecology and Evolution, the Nicholas Institute's John Virdin and co-authors write that we are now at an inflection point in history, where we no longer look to the ocean solely for protein and waterways, but also as a source for many more aspects of our increasingly industrialized society. While much of our focus has been terrestrially based where impacts are easier to identify, the authors write, greater attention is needed on the industrialization of our oceans, which have long been considered as a source of inexhaustible resources and reservoirs for unwanted terrestrially generated waste. 

Authors: Jay S. Golden, John VirdinDouglas NowacekPatrick HalpinLori Bennear, and Pawan G. Patil

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Ocean and Coastal Policy

Environmental Economics

Journal Articles

North Carolina’s Ocean Economy: A First Assessment and Transitioning to a Blue Economy

North Carolina’s ocean and coastal areas and their resources shape a unique and important segment of the state’s economy, particularly for its eastern region. From seafood and commercial fishing opportunities, to access to global markets through shipping and transport, and finally tourism and recreation, thousands of jobs and billions in revenue for the state depend on the ocean and coast. Yet to date, this segment of North Carolina’s economy has not been identified as a discrete contributor in the state. This working paper provides a first assessment of the existing information available to measure the size and extent of North Carolina’s ocean economy, and proposes next steps to transition to a blue economy.

Authors: Jane Harrison, Amy Pickle, Tibor Vegh, and John Virdin

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Blue Economy

Ocean and Coastal Policy

Ecosystem Services

Environmental Economics

State Policy

Working Papers

Sharing Groundwater: A Robust Framework and Implementation Roadmap for Sustainable Groundwater Management in California

This working paper offers a framework and roadmap for development of a robust groundwater-sharing system consistent with California’s Sustainable Groundwater Management Act, which requires communities in priority areas to prepare groundwater sustainability plans. The proposed system draws on global experience. Robustness is its signature feature. Opportunities are maximized by a suite of robust local governance, allocation, and administrative arrangements. Additionally, the proposed system incentivizes innovation, stimulates investment, and facilitates low-cost adjustment to changes in groundwater demand. Among the dynamic components underlying this sharing system are a share register that records ownership and transfers of ownership in the basin’s available shares. These unit shares are fungible; each represents a proportional stake in access to the basin’s groundwater resources. Volumetric allocations are made in proportion to the number of shares held during determined periods throughout the water year.  These allocations are recorded in bank-like water accounts, affording account holders an efficient means to manage their resource but also ensuring that they cannot use more than is available. Unused water can be saved for later use. At the start of the transition to the new system, users are given an allocation buffer so that they have flexibility and time to adjust. Those who want to can make quick non-contestable trades at low cost.

Authors: Mike Young and Bryce McAteer

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Environmental Markets

Western

Water Policy

Environmental Economics

State Policy

Working Papers

Potential Pathways: Future of the Electricity Sector in the Southeast—Workshop Summary, October 5, 2016, Durham, North Carolina

The electricity sector is rapidly changing due to the shale gas revolution, a precipitous decline in coal generation, steep declines in the cost of solar generation, the proliferation of smart grid technologies, and a suite of new environmental regulations. On October 5, 2016, Duke University’s Nicholas Institute for Environmental Policy Solutions and the Duke University Energy Initiative co-hosted a one-day workshop that brought together experts on the electricity sector in the Southeast—including representatives of electric utilities, other market participants, nonprofit organizations, and energy and environmental agencies—to discuss factors affecting the region’s electricity sector. The main topics were future demand uncertainty, the ways that technology innovation could affect business models and regulatory structures, and the role of nuclear energy in the Southeast’s electricity future. This proceedings describes the main ideas that emerged from the workshop. It concludes with issues ripe for future research.

Author: Danielle A. Arostegui

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Climate and Energy

Environmental Economics

Energy Sector

Proceedings

The Uncertain Future of Nuclear Power in the Southeast: Implications of an Aging Fleet for Electricity Sector Planning and Emissions

Nuclear power provides about one-quarter of the electricity in the Southeast and the majority of the region’s non-fossil generation. Beginning around 2030, nuclear plants in the Southeast, as in the rest of the country, will start to reach the end of their initial operating license extensions to 60 years, at which point they must receive an additional license extension or retire. How many nuclear units will seek and receive a second license extension is unknown. Replacing existing nuclear capacity with new nuclear capacity requires approximately 10 to 15 years. If a high percentage of nuclear units in the Southeast do retire at 60 years, it is unlikely that the units can simultaneously be replaced with new units given the long lead times and limited applications for new nuclear plants at the Nuclear Regulatory Commission. Given these circumstances, southeastern states may want to start planning for the potential loss of their largest carbon-free generation source now. This policy brief explores how the potential loss of existing nuclear power plants in the Southeast interacts with region’s other electricity sector challenges—among them, increasing natural gas dependence, demand uncertainty, and emerging technology—and it proposes steps states can take to address these challenges.

Authors: David Hoppock and Sarah Adair

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Climate and Energy

Environmental Economics

Energy Sector

Policy Briefs

Valuing Climate Damages: Updating Estimation of the Social Cost of Carbon Dioxide

To estimate the social cost of carbon dioxide for use in regulatory impact analyses, the federal government should use a new framework that would strengthen the scientific basis, provide greater transparency, and improve characterization of the uncertainties of the estimates, says a new report by the National Academies of Sciences, Engineering, and Medicine. The report also identifies a number of near- and longer-term improvements that should be made for calculating the social cost of carbon. The social cost of carbon (SC-CO2) is an estimate, in dollars, of the net damages incurred by society from a 1 metric ton increase in carbon dioxide emissions in a given year. The SC-CO2 is intended to be a comprehensive estimate of the net damages from carbon emissions—that is, the net costs and benefits associated with climate change impacts such as changes in net agricultural productivity, risks to human health, and damage from such events as floods.  As required by executive orders and a court ruling, government agencies use the SC-CO2 when analyzing the impacts of various regulations, including standards for vehicle emissions and fuel economy, regulation of emissions from power plants, and energy efficiency standards for appliances. 

Authors: Maureen L. Cropper, Richard G. Newell, Myles Allen, Maximilian Auffhammer, Chris E. Forest, Inez Y. Fung,  James K. Hammitt, Henry D. Jacoby, Robert E. Kopp, William Pizer, Steven K. Rose, Richard Schmalensee, and John P. Weyant

Filters

Carbon Tax

Climate and Energy

Environmental Economics

Journal Articles

Revisiting the NAAQS Program for Regulating Greenhouse Gas Emissions under the Clean Air Act

The future is uncertain for the regulation of greenhouse gases from power plants, including the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan, which covers existing plants. The rule is under review in the D.C. Circuit Court of Appeals, and the Supreme Court has indicated its interest in hearing the case. Moreover, during his presidential campaign, president-elect Donald Trump promised to “scrap” the Clean Power Plan. If the rule is overturned or is severely weakened, whether through litigation or executive action, stakeholders are likely to litigate to seek to force the EPA to use other authorities under the Clean Air Act to regulate greenhouse gas emissions.

This working paper examines the opportunities and challenges associated with regulation of greenhouse gases under the National Ambient Air Quality Standards (NAAQS) program, drawing a comparison with the Clean Power Plan’s approach under a different section of the Clean Air Act. The paper offers no opinion on the Clean Power Plan litigation, nor does it advocate for the Clean Power Plan or the NAAQS approach. Its focus is on understanding how the NAAQS program might incorporate greenhouse gases in in the event that the EPA pursues that approach.

Authors: Christina Reichert, Franz Litz, Jonas Monast, Tim Profeta, and Sarah Adair

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Climate and Energy

Clean Air Act

Environmental Economics

State Policy

Working Papers

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